Villa World Group 2012 Full Year Results 27 August 2012 - PowerPoint PPT Presentation

Villa World Group 2012 Full Year Results 27 August 2012

INTRODUCTION __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ FY12 Earnings and Cashflows Carried Forward Sales $53.1m 6 of Villa World sales contracts (222 lots) 6 carried   Net profit after tax of $8.2 million (FY11: $13.5 million) forward, and $4.6m 6 of sales contracts (29 lots) 6 carried Earnings per share (EPS) of 10.4 cents 1 (FY11: 15.8  forward in joint ventures 7 cents 1 ) Operating profit 2 of $9.6 million (FY11: $9.1million)  Development Pipeline  Net cash outflow from operating activities of $14.6 million  Revenue – development and construction of $146.5  An acquisition strategy and budget is in place to take million (FY11: $110.8 million) advantage of opportunities to extend the development pipeline Strong Balance Sheet and Capital Management Distribution/Dividend Net debt of $71.3 million 3 as at 30 June 2012   No interim or final dividend to be paid for FY12 Net gearing of 27.6% 4 as at 30 June 2012.  NTA of $2.01 5 per share  1. Based on weighted average shares on issue of 78,714,262 (FY11: 85,372,526) 2. Underlying operating profit before tax, reflects the statutory profit as adjusted in order to present a figure which reflects the Director’s assessment of the result for the ongoing business activities of the Villa World Consolidated Group. 3. Interest bearing liabilities less cash at bank, excludes bank guarantees 4. (Interest bearing liabilities less cash)/(Total assets less cash) 5. Based on closing shares on issue of 75,223,332. 6. Lots are included on the basis of 100% for Villa World Limited projects and 50% of Joint Venture projects. Represents gross sales price including GST . 2 7. Based on carried forward sales contracts as at 30 June 2012

CORPORATE UPDATE __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Dividends Restructure of Trust  Due to the current economic climate, and particularly in a  All properties now sold – an asset leased to Caltex in slow housing market, it is likely that dividends will remain Goondiwindi, settled in June 2012. suspended in the short to medium term.  The final steps of the corporatisation will be completed in  The focus will be on the share buy back program which is 1H13. anticipated to be more value accretive to the  The simplified structure has greater investor appeal, gives shareholders. Villa World improved flexibility to implement capital initiatives, simplifies reporting requirements, and reduces Share Buy-Back administrative complexity and head office costs.  The Group commenced an on-market Share Buy-Back on 25 July 2011. Board and Management  At 30 June 2012, 10.2 million shares have been  Craig Treasure was appointed as a non-executive director purchased at an average price of 83.9 cents per share in February 2012. Subsequently, Craig was appointed as including brokerage. Executive Chairman of Villa World from 1 August 2012.  This represents a 11.9% reduction in issued capital since the commencement of the buy-back. 3

RESULTS OVERVIEW __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Revenue  Development and construction revenue of $146.5 Accounting settlements by state million (2011: $110.8 million). 350 318 19% 300  268 585 Accounting settlements compared to 406 in 267 2011 (including our share of joint ventures). 250 93% 200  The increase is attributable to the settlement of 138 150 sales at Cascades on Clyde (Victoria) carried forward from the previous financial year and a 100 significant revenue contribution from two new projects in Queensland. 50 0 QLD VIC  12 projects contributed to revenue during the year, FY11 FY12 steady with the prior year. 4

RESULTS OVERVIEW __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ FY12 FY11 Underlying Operating Profit 1 (unaudited) Earnings Change ($'000) ($'000) Revenue - development and construction 146,500 110,835  32.2%  Statutory net profit after tax of $8.2 million (EPS: 10.4 cents) compared to $13.5 million in 2011 Profit from continuing operations 7,920 9,716  (18.5%) (EPS: 15.8 cents). Profit from discontinued operations 288 3,769  (92.4%)  Decrease on prior year due to one off adjustments Total net proft after tax from continuing and discontinued operations 8,208 13,485  (39.1%) included in the prior year. Weighted Average Shares on Issue 78,714 85,374 Underlying Operating Profit 1 increased 5.4% to   EPS 10.4 15.8 (34.0%) $9.6 million (EPS: 12.2 cents) compared to $9.1 million in 2011 (EPS: 10.7 cents) Net (gain)/loss on sale of investment property / fair value 653 (1,376) adjustment for investment properties  The final investment asset was sold in June 2012, at a discount to book value of $653k. This will now Impairment of development land 700 - allow the final steps of the corporatisation to be Hedge ineffectiveness on interest rate swaps 157 105 completed in 1H13. Reversal of impairment of receivables - (5,654)  This is a positive financial result despite the current Subtotal 1,510 (6,925) strong negative sentiment towards property. Income tax benefit / (expense) 106 (2,557) Subtotal 1,404 (4,368) Net operating profit before tax, fair value write- downs and impairments and non recurring one off discontinued 9,612 9,117  5.4% operation expenses Weighted Average Shares on Issue 78,714 85,374 1. Underlying operating profit before tax (unaudited), reflects the EPS 12.2 10.7  14.3% statutory profit as adjusted in order to present a figure which 5 reflects the Director’s assessment of the result for the ongoing business activities of the Villa World Consolidated Group.

OPERATIONAL REVIEW __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ FY12 FY11 Performance Key Drivers Change Group Group Year on year sales were stable, however, the sales skew shifted towards Queensland, with 387 sales (FY11 244), versus 109 sales in Victoria Sales (lots) 496 497 (FY11 253). This was as a result of challenging market conditions in  0% Victoria, a project in the resource strong Gladstone market, and two new Queensland projects coming online in Brisbane. Stage 5 in Cascades Victoria registered in FY12 (sales in prior period),  Settlements (lots) 585 406 contributing to the 267 settlements in Victoria. Improved sales activity in 44% Queensland saw 318 settlements in the year.  Revenue - property sales ($m) 146.5 110.8 32% The material revenue items are the share of joint venture income 1 and project management fees. Cornells Hill JV project had sold out in FY11  Revenue - other ($m) 5.0 7.0 29% and Cotton Ventures has now sold out in FY12 with only Eynesbury JV forecast to be the major contributor of other income in FY13. We have experienced a margin decrease in our regional projects  Gross margin ($m) 37.0 31.8 27% compared to prior year, however the larger, well established projects in Gladstone and North Brisbane have maintained their margins year on  Margin (%) 25.2% 28.7% 4% year. Improved market conditions in the second half of 2012 saw the mean rate Mean rate of sale pcm 41.3 41.4 of sales rise from 34.4 per month in the 1H12 to 48.3 in 2H12. Strength of  0% a diversified portfolio. 12 projects contributing to profit, including new projects Park Vista and Number of projects contributing to 12 12 Circa II. Two new projects at Brookside and Burpengary to contribute to  0% profit revenue in FY13. 6 1. Villa World’s joint ventures include Eynesbury, Cornell’s Hill and Cotton Ventures.